[Federal Register Volume 75, Number 215 (Monday, November 8, 2010)]
[Notices]
[Pages 68659-68660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28182]
[[Page 68659]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63227; File No. SR-EDGA-2010-17]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Amendments to the EDGA Exchange, Inc. Fee Schedule
November 2, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 29, 2010, the EDGA Exchange, Inc. (the ``Exchange'' or
the ``EDGA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its fees and rebates applicable to
Members \3\ of the Exchange pursuant to EDGA Rule 15.1(a) and (c) by
making an amendment to its fee schedule.
---------------------------------------------------------------------------
\3\ A Member is any registered broker or dealer, or any person
associated with a registered broker or dealer, that has been
admitted to membership in the Exchange.
---------------------------------------------------------------------------
All of the changes described herein are applicable to EDGA Members.
The text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.directedge.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Currently, for Non-Displayed Orders, Members are charged $0.0010
per share. However, this rate is contingent upon a Member adding
greater than 1,000,000 shares on a daily basis, measured monthly.
Members not meeting this minimum are currently charged $0.0030 per
share.
First, the Exchange proposes to add clarifying language in footnote
2 to state that a Flag H would be yielded in this situation. Next, the
Exchange proposes to add an additional way for Members to be charged
the reduced rate of $0.0010 per share. This additional method would
allow Members to qualify for the reduced rate if they post on EDGA
greater than 8,000,000 shares on a daily basis, measured monthly
(yielding Flags B, V, Y, 3 or 4). The Exchange proposes to make a
conforming amendment to change the word ``this'' to ``either'' in
footnote 2 to clarify that a Member can receive the rate of $0.0010 per
share by satisfying either condition.
Finally, the Exchange proposes to provide a reduced rate for non-
displayed (``Flag H'') executions for a non-aggregated MPID
representing the volume of a Member and meeting certain criteria. For
executions in stocks priced $1.00 and over, if the average daily volume
(``ADV'') of Flag H executions for a non-aggregated MPID is increased
such that its ADV is 1,000,000 greater than its ADV of Flag H
executions averaged across the month of October 2010, then the non-
aggregated MPID would qualify for a rate of $0.00025 per share. For
executions in stocks priced below $1.00, if the ADV of Flag H
executions for a non-aggregated MPID is increased such that its ADV is
1,000,000 greater than its ADV of Flag H executions averaged across the
month of October 2010, then the non-aggregated MPID would qualify for a
rate of .025% of the total dollar volume of the Flag H executions. The
Exchange believes that these reduced rates for Flag H executions will
incent Members to add liquidity to EDGA.
The Exchange believes that the above pricing is appropriate since
lower rates for Flag H executions are directly correlated with more
stringent criteria. The lowest rate of $0.00025 per share for Flag H
executions has the most stringent criteria associated with it and is a
lower rate than the next best rate of $0.0010 per share, which in turn
is a better rate than the default rate of $0.0030 per share for Flag H
executions. For example, assuming an average ADV for the month of
October 2010 of 500,000, a non-aggregated MPID would need 1.5 million
in Flag H executions to qualify for the rate of $0.00025 per share. In
order to qualify for the next best rate of $0.0010, a Member would have
to add greater than 1 million shares or post greater than 8 million
shares on a daily basis, measured monthly. If none of these criteria
are met, the Member would receive the highest rate of $0.0030 per share
for Flag H executions. In addition, these lower rates for Flag H
executions also result, in part, from lower administrative costs
associated with higher volume.
EDGA Exchange proposes to implement these amendments to the
Exchange fee schedule on November 1, 2010.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\4\ in general, and
furthers the objectives of Section 6(b)(4),\5\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its members and other persons using its
facilities. The Exchange notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive. The proposed rule change reflects a competitive pricing
structure designed to incent market participants to direct their order
flow to the Exchange. In addition, the lower rates for Flag H
executions also result, in part, from lower administrative costs
associated with higher volume. Finally, the Exchange believes that the
proposed rates are equitable in that they apply uniformly to all
Members. The Exchange believes the fees and credits remain competitive
with those charged by other venues and therefore continue to be
reasonable and equitably allocated to Members.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
[[Page 68660]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3) of the Act \6\ and Rule 19b-4(f)(2) \7\ thereunder. At any
time within 60 days of the filing of such proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 19b-4(f)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-EDGA-2010-17 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGA-2010-17. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission,\8\ all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-EDGA-2010-17 and should be
submitted on or before November 29, 2010.
---------------------------------------------------------------------------
\8\ The text of the proposed rule change is available on the
Exchange's Web site at http://www.directedge.com, on the
Commission's Web site at http://www.sec.gov, at EDGA, and at the
Commission's Public Reference Room.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
[FR Doc. 2010-28182 Filed 11-5-10; 8:45 am]
BILLING CODE 8011-01-P